Wordblog

Finding out where a business is making a profit or not is always difficult, especially between annual reports. Within groups of companies it is even more difficult even by examining annual reports, let alone between reports. So it is not entirely surprising that that journalists working for for Guardian Media Group in the Manchester area and the editorial view from London are different.

A full-page advertisement placed by the regional journalists says the Manchester Evening News and the weekly papers will still make £2 million this year. Commenting on the ad in its own pages, the Guardian says:

They [the northern journalists] are wrong to say that the proposed cuts are in order to “service” the ongoing expansion of the Guardian. The sad truth is twofold. First, the group’s regional papers are rapidly moving from profit into loss, and all the cuts will do is to mitigate those losses. Second, the Scott Trust, which is the ultimate owner of the business, cannot afford to sustain the ongoing (and possibly permanent) losses of more than 30 local papers while also protecting and preserving the Guardian in the most hostile economic and technological climate newspapers have known for generations.

Some muddled thinking there. Are the papers “rapidly moving from profit into loss” or are they “ongoing” which means actually in progress? There is a measure of metropolitan self-justification in this.

In the rapidly deteriorating finances of the newspaper industry it is difficult to know what to make of this. The annual report of GMG for 2007/8, published last July, shows that Regional Media made an operating profit of £14.3m (down from £19.4m the previous year. The report says: “GMG Regional Media continues to be a leader in its markets. While trading conditions have suppressed financial performance, the business has the potential for future growth and remains a strong, profitable asset within the portfolio.”

But things are changing extremely rapidly and the Scott Trust, owners of GMG, which became a limited company in October last year, has as its core purpose:

To secure the financial and editorial independence of The Guardian in perpetuity: as a quality national newspaper without party affiliation; remaining faithful to its liberal tradition; as a profit-seeking enterprise managed in an efficient and cost-effective manner. All other activities should be consistent with the central objective.

The Guardian leader today acknowledges the correctness of its regional colleagues in saying” “The MEN has for many years helped to support the Guardian which — in common with several quality national newspapers — struggles to be profitable.”

“Struggles to be profitable” is a neat euphemism for “loss making” — £13.9 million in the last financial year and £15.9 million the previous year.

Quite why the Guardian devoted its first leader today to what is an internal group matter, is  hard to fathom — mysterious.  But I doubt if it will do anything to lessen the aggrieved feelings of the northern journalists (Manchester chapels website).